Back to News
Legal Hotline Attorney Vern Jarboe answers frequently asked questions from Kansas REALTORS® about their transactions.
REBR Legal Hotline is available in the REBR IMS Store! Only $150 will keep you and your entire firm in touch with Vern Jarboe, the REBR Legal Hotline Attorney all year long!
Contract - Termite Treatment Language
Question: You asked about interpretation of contract language regarding evidence of prior treatment.
Answer: It is typical that termite inspectors will indicate that treatment is needed if there is evidence of prior infestation, even though no live termites are observed, but no evidence of prior treatment. Evidence of prior treatment is usually determined based upon physical evidence at the site as opposed to proof by the seller of historic treatment. This arises particularly because sometimes real estate changes hands multiple times and therefore the current owner may not have the evidence of prior treatment.
License Law - Buyer Hires Negotiator
Question: You have a situation where a client has asked you to help with acquisition of properties which are in short sale opportunities. The buyer has had an attorney prepare a short sale option agreement and hired someone he calls a negotiator. You asked whether or not you can pay the negotiator out of your fee.
Answer: It would appear to me the actions described are actions which would properly be brokerage services under the Kansas license law. On that basis, the negotiator either needs a Kansas license or you cannot pay them.
Contract - Signatures on HUD 1 Statements
Question: You indicate that you thought a HUD 1 needed to be signed by seller, buyer and closing agent.
Answer: That is a traditional practice. However, technically, whoever handles the closing is responsible for determining what signatures are required by them. There is no particular rule on this. I have seen closings where buyer and seller signed separate HUD 1's but the real question is whether or not the closing agent is satisfied with their own practice.
Question: You asked about provisions in the license law with respect to payments from a broker to an incorporated team.
Answer: The appropriate section of the license law is K.S.A. 58-3062(b)(1). This section was amended some years ago to clear up confusion over payments to persons who were working for the broker but with a separate team affiliation.
Contract - Potential Breach by Buyer
Question: You have a situation where the buyer is out of time with respect to a request for a cancellation. They failed to meet the timeline required in the inspection contingency. You asked about remedies of the seller.
Answer: If the earnest money is substantial then the seller may want to get into a debate with the buyer. However, most earnest money is insufficient to warrant this kind of debate. If the seller were to indicate that they intended to keep the earnest money or the buyer should go ahead and close because they had waived the contingency then that might work out. However, it would likely require hiring an attorney and therefore for small amounts of earnest money it is not very useful.
Contract - Right of Seller to List
Question: You have a situation where the seller is in a foreclosure. A sheriff sale has occurred but the seller appears to have rights of redemption. You asked whether or not the seller has the necessary property interest to list the property for sale.
Answer: In my opinion, the seller still has a property interest and can list the property for sale. Clearly, the lender does not yet own the property, until expiration of redemption rights, and therefore the lender cannot list the property.
Contract - Post Closing Date Issues
Question: You have a situation where a property was originally supposed to close much earlier. It was extended for financing and that time period for closing has now also expired. You asked about the best practice.
Answer: It is most likely that you should treat the contract as expired. If the buyer and seller agree to extend the contract again, then an addendum with a new closing date could certainly be negotiated. However, the seller needs to know whether or not the buyer is still actively pursuing financing and has reasonable prospects. If the seller is not satisfied that those things are true then the seller may not want to extend for another period.
